Frontiers of Entrepreneurship Research

Volume 29 | Issue 6
CHAPTER VI. ENTREPRENEURIAL Article 12
COGNITION

6-6-2009

THE ROLES OF ENTREPRENURIAL

ALERTNESS, PRIOR KNOWLEDGE AND
SOCIAL NETWORKS IN THE PROCESS OF
OPPORTUNITY RECOGNITION
(SUMMARY)
Ru-Mei Hsieh
National Sun-Yat Sen University, Taiwan, p924010015@student.nsysu.edu.tw

Donna J. Kelley
Babson College, USA

Chang-Yung Liu
I-Shou University, Taiwan

Recommended Citation
Hsieh, Ru-Mei; Kelley, Donna J.; and Liu, Chang-Yung (2009) "THE ROLES OF ENTREPRENURIAL ALERTNESS, PRIOR
KNOWLEDGE AND SOCIAL NETWORKS IN THE PROCESS OF OPPORTUNITY RECOGNITION (SUMMARY)," Frontiers
of Entrepreneurship Research: Vol. 29: Iss. 6, Article 12.
Available at: http://digitalknowledge.babson.edu/fer/vol29/iss6/12

This Summary is brought to you for free and open access by the Entrepreneurship at Babson at Digital Knowledge at Babson. It has been accepted for
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 Hsieh et al.: ENTREPRENURIAL ALERTNESS, PRIOR KNOWLEDGE AND SOCIAL NETWORKS

SUMMARY

THE ROLES OF ENTREPRENURIAL ALERTNESS, PRIOR KNOWLEDGE AND

SOCIAL NETWORKS IN THE PROCESS OF OPPORTUNITY RECOGNITION

Ru-Mei Hsieh, National Sun-Yat Sen University, Taiwan

Donna J. Kelley, Babson College, USA
Chang-Yung Liu, I-Shou University, Taiwan

Principal Topic

Entrepreneurial alertness has been identified as a major factor in the process of opportunity
recognition, but the components of alertness and the relationships between this and other factors
are still ambiguous. Furthermore, limited empirical testing exists to validate the alertness construct
(Mitchell et al., 2007; Tang, 2008). We attempt to reveal the critical role of alertness in the
opportunity recognition process. This study defines entrepreneurial alertness as a kind of cognitive
ability for perceiving and interpreting market information (Gaglio & Katz, 2001). We investigate
the different types of prior knowledge (ways to serve markets, customer problems, markets,
technology (Shane, 2000; Marvel & Lumpkin, 2007) and social sources of information (mentors,
informal industry networks, participation in professional forums) (Ozgen & Baron, 2007) that are
associated with entrepreneurial alertness (perception and interpretation ability) (Kirzner, 1979;
Gaglio & Katz, 2001). Our findings suggest that entrepreneurial alertness is linked to the
innovativeness of the opportunities recognized.

Method

Participants in the study were founders of Taiwanese start-ups registering with the Ministry of
Economic Affairs between June, 2008 and November, 2008. We randomly mailed a structured
questionnaire to 1,000 entrepreneurs in December, 2008 and 114 valid returns were obtained. We
used hierarchical regression as the statistical technique to test the hypotheses.

Results and Implications

Results indicate that prior knowledge of customer problems and markets, and social sources of
informal industry networks had positive effects on entrepreneurial alertness (perception and
interpretation ability). Moreover, interpretation ability was positively associated with the
innovativeness of the opportunities. In addition, we found that the relationships between prior
knowledge of markets and opportunity recognition were partial mediated by interpretation ability.
Our findings have implications for theory and for entrepreneurs. We suggest that entrepreneurial
alertness may provide valuable conceptual tools for understanding the process of opportunity
recognition. Some individuals are better able to recognize innovative opportunities than others
because they have better ability to perceive and interpret information.

CONTACT: Ru-Mei Hsieh; p924010015@student.nsysu.edu,tw; Department of Business

Administration, National Sun-Yat Sen University, Taiwan.

Frontiers of Entrepreneurship Research 2009 1